Trump comments put Samsung in tough spot

Aug 23,2019

U.S. President Donald Trump again said that he has to help Apple in its rivalry with Samsung Electronics as U.S. tariffs on China are set to weigh on the iPhone maker.

After meeting with Apple CEO Tim Cook last week, Trump told reporters Wednesday that he was considering Cook’s argument that tariffs against China could hurt the U.S. company and instead help smartphone competitor Samsung.

The United States is set to levy a 10 percent tariff on imported Chinese goods including laptops and mobile phones from Dec. 15 as part of its ongoing trade war with China. Other Apple products such as the Apple Watch could be subject to tariffs from next month.

Most of Apple’s smartphone manufacturing lines are in China, while rival Samsung’s production is largely based in Vietnam and India.

“Now the problem was that Samsung […] wouldn’t be paying tariffs,” said Trump at the White House. “I’ve got to help him out, short term, with that problem because it’s a great American company.”

Although Trump did not clarify how he could help Apple, the latest remark closely follow comments he made earlier this week.

“He made a good case that … it’s tough for Apple to pay tariffs if they’re competing with a very good company [that’s not],” Trump told reporters at an airport in New Jersey on Sunday.

The comments put pressure on Samsung Electronics, which has faced growing headwinds in the past year. Due to a drop in semiconductor prices, Samsung recorded a 56.3 percent drop in operating profit in the second quarter. Recent Japanese restrictions on exports to Korea of high-tech materials used in semiconductor production have further weighed on the company.

Although U.S. trade measures against Korean smartphones are highly unlikely, the United States has in the past introduced safeguarding measures that limit imports of Korean products. In 2018, the United States introduced safeguarding measures against Korean washing machines.